Copper price keeps soaring as bullish sentiment prevails

Copper prices continued to soar on Friday, surpassing the nine-year peak seen during the previous session, as bullish sentiment towards base metals resumed after the Chinese New Year.

Copper March futures jumped to as high as $4.0910 a pound ($9,019.16 a tonne) in New York, its highest since September 2011. The industrial metal is on its way for a third straight weekly gain, having gone up by nearly 15% year-to-date.

Click here for an interactive chart of copper prices.

While copper’s ascent may be an indicator of higher demand, some market analysts believe it may have been squeezed on the supply side too.

Citigroup analysts have pinned the global copper deficit at about 500,000 tonnes starting this year

“You have to remember that commodities like copper are built by both the supply and the demand story. The supply story in copper actually is part of the problem here,” Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors, told CNBC in an interview.

Sanchez said reduced production in Peru, which services demand in top consumer China, may have driven copper prices higher.

Citigroup analysts have pinned the global copper deficit at about 500,000 tonnes starting this year, according to Bloomberg.

The rally in copper prices has also sent the valuations of the metal’s producers higher. Shares of BHP and Rio Tinto, two of the biggest copper mining companies, have gone up by 12.8% and 15.9% YTD respectively.

The stock price of Freeport-McMoRan has gone up so much that Barrick Gold, which has been rumored to be interested in a merger of equals, has said it will move on to other opportunities.

Other industrial metals

Copper is not the only industrial that has seen monumental gains in 2021.

Nickel has surged 17.3% YTD to 7-year highs as automakers continue to ramp up EV production in response to changing consumer demands, while battery composition continues to change favoring nickel-dense chemistries.

Tin, used in personal electronics and electric vehicles, have rocketed 24% YTD to a decade high, with global mine supply under threat due to coronavirus restrictions.

from MINING.COM https://ift.tt/3ubC0gG